Maersk Group records impressive $1.6bn profit in Q1

Maersk Group, the Danish shipping conglomerate, has reported a ‘very satisfactory’ $1.6 billion profit for the first quarter (Q1), despite a 10 percent drop in revenues. The results include $223 million gain on the sale of shares in Danske Bank, with 85 percent ordered by AP Moller Holding, and 7 percent by other shareholders.

As oil price dropped, Maersk Oil’s profit dropped from $346 million recorded in the Q1 of 2014 to $208 million in the Q1 of this year, and cash flow fell to $105 million from $734 million in Q1 of 2014. Lower price expectations for oil are informing cost-benefit analyses for the unit’s future exploration activities.

Also, APM Terminals recorded $190 million profit, down from $215 million in the same period last year. Maersk Line reached a record result for the Q1, with $714 million profit.

Currencies weakening against the US dollar affected results, with oil-dependent markets also returning lower revenues as the oil price slumped, said the company.

APM Shipping Services, the business unit that includes Maersk Supply Service, Maersk Tankers and Svitzer, saw an increase in profit to $94 million. Maersk Supply Service and Maersk Tankers both reported significantly improved profits, enough to counter a drop in profit at Svitzer and a loss at Damco.

“In a quarter impacted both by low oil prices and low economic growth, the underlying profit increased by 18 percent to $1.3 billion, mainly driven by Maersk Line, Maersk Drilling and APM Shipping Services,” said Nils Andersen, the group chief executive officer.

According to him, all businesses affected by low oil prices launched cost initiatives to safeguard long-term profits and competitiveness. “Based on the performance in the first quarter, the Group now expects an underlying result of about $4 billion for 2015,” he said.